Bouncing a cheque in Dubai can have serious legal and financial repercussions. In this article, we will explore what happens when a cheque is bounced, the fine for a bounced cheque in Dubai, and the steps to resolve the issue.
What is a bounced cheque?
A bounced cheque occurs when there are insufficient funds in the issuer’s account to cover the cheque amount. It can also occur due to signature mismatch, incorrect account details, or account closure.
What are the legal consequences of a bounced cheque?
Bouncing a cheque in Dubai is considered a criminal offense, and the recipient or the bank can file a complaint against the issuer. If convicted, the issuer can face imprisonment, a travel ban, or a criminal record that can negatively impact their future financial prospects.
The Law in UAE for Bounced Cheques
The law in UAE for bounced cheques is outlined in Federal Law No. 18 of 1993 (the UAE Commercial Transactions Law), as amended by Federal Law No. 35 of 1992. The law states that “a bounced cheque is a criminal offence punishable by imprisonment and/or a fine”. The issuer of the bounced cheque can face legal action, and if convicted, they may be subject to imprisonment and/or a fine.
The Implications of Bouncing a Cheque:
Bouncing a cheque in UAE can have significant legal and financial implications. It can lead to criminal prosecution, and if convicted, the issuer can face imprisonment for up to three years or a fine of up to AED 10,000, or both. Moreover, the issuer may also face a travel ban or have a criminal record that can negatively affect their future employment and financial prospects.
How Does it Work?
If a cheque bounces in UAE, the recipient or the bank can file a complaint against the issuer. The issuer will then be summoned to appear before the public prosecutor’s office to explain the reasons for the cheque bounce. If the issuer fails to attend the hearing, an arrest warrant may be issued. If the issuer attends the hearing, they may be given a chance to settle the matter by paying the cheque amount and the associated legal fees.
If the issuer does not settle the matter, a case may be filed in court, and the issuer will be summoned to attend a hearing. If convicted, the issuer can face imprisonment and/or a fine. Additionally, the issuer may be required to compensate the recipient for any damages incurred due to the cheque bounce.
Bouncing a cheque in UAE is a serious offence with severe legal and financial consequences. It’s important to maintain a sufficient balance in the account, ensure that the signature and account details are correct, and keep track of the cheque issuance to avoid bouncing a cheque. If you do face a bounced cheque issue, it’s advisable to seek legal advice and take immediate action to resolve the matter.
What is the fine for a bounced cheque in Dubai?
The fine for a bounced cheque in Dubai depends on the cheque value. For cheques worth less than AED 50,000, the fine is AED 2,000. For cheques between AED 50,000 and AED 100,000, the fine is AED 5,000, while for cheques above AED 100,000, the fine is AED 10,000. It’s important to note that these fines are in addition to any legal fees or penalties that may be incurred due to the cheque bouncing.
How to pay the fine for a bounced cheque in Dubai?
To pay the fine for a bounced cheque in Dubai, you can visit any Dubai Police station or Dubai Courts Service Center. You will need to provide your Emirates ID or passport and the original bounced cheque as evidence. You can also pay the fine online through the Dubai Police website or the Dubai Courts website. Once you have paid the fine, you can collect a receipt as proof of payment.
What are the steps to resolve a bounced cheque issue in Dubai?
The first step to resolving a bounced cheque issue is to contact the recipient and try to negotiate a repayment plan. If this is not possible, seeking legal advice from a lawyer who specializes in banking and financial disputes is advisable. The lawyer can advise on the best course of action, which may include settling the dispute through arbitration or mediation or filing a defense in court.
What is the role of a lawyer in resolving a bounced cheque issue?
A lawyer can play a crucial role in resolving a bounced cheque issue. They can advise on the legal options available, negotiate a settlement with the recipient, or represent the issuer in court. Additionally, they can guide the issuer on how to avoid similar situations in the future and provide legal advice on financial transactions.
How to avoid bouncing a cheque in Dubai?
To avoid bouncing a cheque in Dubai, it’s essential to maintain a sufficient balance in the account and ensure that the signature and account details are correct. Additionally, it’s advisable to keep track of the cheque issuance and ensure that the cheque is presented for payment within the validity period.
In conclusion, bouncing a cheque in Dubai can have serious legal and financial consequences. It’s important to take immediate action to resolve the issue, pay the fine, and seek legal advice if necessary. By following the steps mentioned in this article and taking preventative measures, you can avoid bouncing a cheque in the future.